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Here's Why You Should Consider Investing in Allegion Stock Now
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Allegion plc (ALLE - Free Report) stands to benefit from strength across its businesses, focus on operational excellence and accretive acquisitions. The company remains focused on investing in growth opportunities and strengthening its long-term market position.
ALLE, which has a market capitalization of $12.7 billion, currently carries a Zacks Rank #2 (Buy). Let’s delve into the factors that have been aiding the firm for a while now.
Business Strength: Allegion is benefiting from strong momentum across its segments. Stable demand across several end markets like education, healthcare, government, hospitality and retail within the non-residential business is driving the Americas segment. The increase in demand for residential products also bodes well. In second-quarter 2024, revenues from the Americas segment increased 6% year over year to $770.7 million.
Increased adoption of advanced technologies and solutions in the electronics security products market, such as wireless locks and mobile-enabled smart locks, is expected to drive Allegion’s performance in the quarters ahead.
Accretive Acquisitions: Allegion is focused on strengthening its business and product offerings through acquisitions. In June 2024, the company acquired Krieger Specialty Products. The addition of Krieger’s expertise in specialty solutions will enable ALLE to strengthen its door and frame portfolio. Also, in the same month, it purchased Unicel Architectural Corp, which will enable it to boost its product portfolio within the non-residential business. Both the acquired businesses have been incorporated into the Americas segment.
Also, in March 2024, Allegion completed the acquisition of Spain-based Montajes Electronics Dorcas S.L. (Dorcas), which has been incorporated into the International segment. The inclusion of Dorcas’ expertise in electric strikes and lock solutions enabled Allegion to boost its security products portfolio and expand its presence in healthcare and education end markets. It’s worth noting that acquisitions boosted the company’s sales by 1% in the second quarter.
ALLE Stock’s Price Performance
Image Source: Zacks Investment Research
In the past three months, the company’s shares have gained 26.5% compared with the industry‘s 15.6% growth.
Rewards to Shareholders: The company remains committed to increasing shareholders’ value through dividend payments and share repurchases. In the first six months of 2024, it paid out dividends of $83.8 million, reflecting an increase of 5.7% year over year. In the same period, Allegion repurchased shares for $80 million.
Exiting the second quarter of 2024, ALLE was left to repurchase shares worth $380 million under its 2023-approved program. Also, in February 2024, it announced a 7% hike in its quarterly dividend rate, which is currently 48 cents per share.
Estimate Revisions: The Zacks Consensus Estimate for ALLE’s 2024 earnings is pegged at $7.26 per share, indicating an increase of 1.4% from the 60-day-ago figure. The consensus estimate for 2025 earnings is pegged at $7.56 per share, indicating a rise of 0.7% in the same period.
YOU delivered a trailing four-quarter average earnings surprise of 56.7%. In the past 60 days, the Zacks Consensus Estimate for Clear Secure’s 2024 earnings has increased 18.3%.
Brady Corporation (BRC - Free Report) currently sports a Zacks Rank of 1. BRC delivered a trailing four-quarter average earnings surprise of 4.6%.
In the past 60 days, the consensus estimate for Brady’s fiscal 2025 (ending July 2025) earnings has increased 4.6%.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 (ending June 2025) earnings has increased 1.4%.
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Here's Why You Should Consider Investing in Allegion Stock Now
Allegion plc (ALLE - Free Report) stands to benefit from strength across its businesses, focus on operational excellence and accretive acquisitions. The company remains focused on investing in growth opportunities and strengthening its long-term market position.
ALLE, which has a market capitalization of $12.7 billion, currently carries a Zacks Rank #2 (Buy). Let’s delve into the factors that have been aiding the firm for a while now.
Business Strength: Allegion is benefiting from strong momentum across its segments. Stable demand across several end markets like education, healthcare, government, hospitality and retail within the non-residential business is driving the Americas segment. The increase in demand for residential products also bodes well. In second-quarter 2024, revenues from the Americas segment increased 6% year over year to $770.7 million.
Increased adoption of advanced technologies and solutions in the electronics security products market, such as wireless locks and mobile-enabled smart locks, is expected to drive Allegion’s performance in the quarters ahead.
Accretive Acquisitions: Allegion is focused on strengthening its business and product offerings through acquisitions. In June 2024, the company acquired Krieger Specialty Products. The addition of Krieger’s expertise in specialty solutions will enable ALLE to strengthen its door and frame portfolio. Also, in the same month, it purchased Unicel Architectural Corp, which will enable it to boost its product portfolio within the non-residential business. Both the acquired businesses have been incorporated into the Americas segment.
Also, in March 2024, Allegion completed the acquisition of Spain-based Montajes Electronics Dorcas S.L. (Dorcas), which has been incorporated into the International segment. The inclusion of Dorcas’ expertise in electric strikes and lock solutions enabled Allegion to boost its security products portfolio and expand its presence in healthcare and education end markets. It’s worth noting that acquisitions boosted the company’s sales by 1% in the second quarter.
ALLE Stock’s Price Performance
Image Source: Zacks Investment Research
In the past three months, the company’s shares have gained 26.5% compared with the industry‘s 15.6% growth.
Rewards to Shareholders: The company remains committed to increasing shareholders’ value through dividend payments and share repurchases. In the first six months of 2024, it paid out dividends of $83.8 million, reflecting an increase of 5.7% year over year. In the same period, Allegion repurchased shares for $80 million.
Exiting the second quarter of 2024, ALLE was left to repurchase shares worth $380 million under its 2023-approved program. Also, in February 2024, it announced a 7% hike in its quarterly dividend rate, which is currently 48 cents per share.
Estimate Revisions: The Zacks Consensus Estimate for ALLE’s 2024 earnings is pegged at $7.26 per share, indicating an increase of 1.4% from the 60-day-ago figure. The consensus estimate for 2025 earnings is pegged at $7.56 per share, indicating a rise of 0.7% in the same period.
Other Key Picks
Some other top-ranked stocks are discussed below.
Clear Secure, Inc. (YOU - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
YOU delivered a trailing four-quarter average earnings surprise of 56.7%. In the past 60 days, the Zacks Consensus Estimate for Clear Secure’s 2024 earnings has increased 18.3%.
Brady Corporation (BRC - Free Report) currently sports a Zacks Rank of 1. BRC delivered a trailing four-quarter average earnings surprise of 4.6%.
In the past 60 days, the consensus estimate for Brady’s fiscal 2025 (ending July 2025) earnings has increased 4.6%.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 (ending June 2025) earnings has increased 1.4%.